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South Africa: China's gateway into Africa

Kobus van der Wath

Following 13 years of diplomatic ties, it is becoming more evident that trade between China and South Africa is gaining momentum and for those companies who may have ignored this growing trade relationship in the past, are now forced to recognize the potential for doing business with China.

Not only is there room for growth in trade between South Africa and China, but China is viewing the well-developed infrastructure South Africa provides as the key to unlocking the gateway into the rest of Africa.

In 2009, China surpassed the United States, to become South Africa’s largest export destination.  This emanated from major exports in raw materials to fuel the booming Chinese economy.  Trade between China and South Africa reached $16bn in 2009 and is expected to grow year on year, with the signing of various cooperation deals in August 2010, by President Zuma during his State visit to China.  These deals focus on the mineral resources sector, railway development, construction industry as well as the mining sector and finally power transmission and nuclear power.

Scope for trade with the rest of Africa is also being given added impetus by the Asian country’s capacity to innovate as well as currently China enjoys an enviable fiscal situation and has the demand to invest in infrastructure. As China is moving up the development ladder it is prudent that other emerging economies explore and develop trade relations with this country, currently listed at the top of the list of 28 developing economies globally.

Kobus van der Wath, Founder and Group Managing Director of The Beijing Axis, with offices in Johannesburg and Beijing, stressed the importance of understanding this developing market for the benefit of trade for both South Africa and Africa, “To ignore China would be a fundamental mistake for any business seeking growth in a world limited with expansion opportunities as a result of the economic meltdown in recent years in developed markets. China provides the platform to harness increased trade, develop new markets as well as given China’s growing household and industrial consumption, the demand for exports from South Africa and Africa is rising rapidly.  Business has the opportunity to grow by developing partnerships with China,” concluded van der Wath.

Being located in Beijing, van der Wath has realized the importance of understanding how to do business with the Chinese.  He has subsequently supported Siyenza’s founding of the first China Inc meets SA Inc Business Forum, aimed at assisting South African and African business to evolve to expand trade relations with China.  “Our desire is to help business understand the culture of the Chinese business market and to fully embrace this immense trading partner available to our companies.  The Chinese have the capacity to invest in major infrastructure projects on this continent, to provide finance for developments and are keen to source raw materials and products to service their growing needs.” stated van der Wath.

The China Inc meets SA Inc Business Forum will address key trade issues amongst others, including the following:

  • The Game in Africa: Key Players and Strategic Interests;
  • Formulating a China Strategy: Planning and Implementation Issues during Corporate Engagement;
  • Unlocking Opportunities in the Resource Sector;
  • Strategic Considerations and Business Dynamics in Asia;
  • Does Culture Matter?; and
  • As well as - Panel Discussion: Strategy, Implementation and South Africa Inc Cases

Can South Africa and Africa take the risk and ignore the Chinese?  “Any business doing so, would be doing so at their peril.” said van der Wath.

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